Kathie Bracy's Blog

A forum for Ohio educators, sharing thoughts regarding their health care and pension system (STRS Ohio). Researcher John Curry manages a clearinghouse of related e-mails, articles, announcements, etc. His daily mailings include many items that do not make it to this blog. Contact John (curryfeezer@yahoo.com) if you wish to be on his e-mail list. Kathie Bracy: kbb47@aol.com.

Wednesday, January 22, 2014

Thought for Today.....

NO other Ohio pension system pays out at the
rate of 88.5% Final Average Salary for 35 years work....they all (except STRS)
pay 77%......so, the solution IS VERY EASY for STRS...immediately stop offering
88.5% and drop it back to 77% for 35 years! Stop
penalizing current retirees with additional COLA cuts!

Monday, January 20, 2014

Another editorial in the Dispatch re: Ohio STRS

Dispatch editorials express the view of the Dispatch
editorial board, which is made up of the publisher, the president of The
Dispatch, the editor and the editorial-writing staff. As is the traditional
newspaper practice, the editorials are unsigned and intended to be seen as the
voice of the newspaper. Comments and questions should be directed to the editorial page editor.

Monday January 20, 2014

News that Ohio’s State Teachers Retirement System is even more off the mark
in meeting its future obligations should prompt immediate action, not a
wait-and-see, fingers-crossed approach.

In November, a consultant hired by the fund said it would take 36.1 years
for the system that serves almost 500,000 current and retired Ohio teachers to
pay off its unfunded liabilities. That meant that the fund was out of compliance
with state law, which requires that public pension funds be able to meet their
obligations within a maximum of 30 years.

But now, the situation has gotten even worse; the consultant, Segal Co. of
Chicago, made a miscalculation during last year’s actuarial study. The funding
period actually now stands at 40.2 years.

Because STRS already was out of compliance at the 36.1 years, its board is
to present a corrective plan to the Ohio Retirement Study Council by Feb. 24. It
should take into account the new projections and work to comply with state law.
It is possible that members might have to take further benefit cuts or make
higher employee contributions.

The state mandate isn't arbitrary. It is a protection for Ohio’s public
employees, assuring them of the financial security they are counting on when
they retire.

While Ohio’s retirement funds are not in immediate danger, others around
the country have gotten into serious trouble by waiting too long to address
unhealthy trends.

This four-year error is only a serious problem if the retirement system
fails to take it seriously. Making adjustments today can ward off far more
painful adjustments later.

Cutting pension benefits amounts to taking away pay from workers after they
already put in their work. If governments feel the need to take property, they
should look for wealthy victims. But, of course, the Wall Street folks who bear
much of the blame for the problem seem likely to get away unscathed.

Governments aren't seizing properties sold too cheaply or reclaiming tax
breaks to arenas and businesses. Why take back workers' money?

Much of the underfunding dates to the 1990s stock bubble, when many pension
managers made minimal contributions because the stock market run-up was
financing their funds for them. The bond-rating agencies green-lighted this
practice, effectively assuming the bubble would grow ever larger. (Some of us knew better.) Wall
Street types engorged
themselves on fees from these funds, taking money that could be used to pay
retirees.

Once governments got in the habit of not making contributions, they found
it hard to break when the bubble burst. Illinois and Chicago went a decade
without making required contributions. The collapse of the housing bubble
devastated state and local revenue, while increasing expenses, making the
obligations harder to meet.

Still, in most cases, the unfunded liabilities are not nearly as large as
has often been claimed and can still be met. For example, I've calculated that
Chicago’s unfunded liabilities are around 0.6 percent of the value of future
income over the next 30 years.The figure is comparable for the state of
Illinois. These sums are hardly trivial, but presenting them in this light is
not as scary as simply reporting that tens of billions of dollars are owed, as
those pushing cuts are prone to do.

Taking care of these obligations could mean some increase in taxes, which
is inconvenient, but this is money owed. As with the federal debt ceiling,
another source of scare mongering, the place to deal with the problem is when
the commitments are being made, not when it is time to pay up.

In the case of Detroit, there will be no choice but to have the state
intervene as it already has in appointing a city manager. The city is a creation
of the state. Under its constitution, which requires pensions be paid, it is
difficult to see how the Michigan can avoid taking responsibility and paying the
pension obligations.

The crucial point is that employees worked for these pensions. They are not
a gift from the government; they were part of their pay package.Governments are
not looking to seize properties that may have been sold at too low a price or to
reclaim tax breaks and incentives to sports teams and other businesses that may
have been too generous. Why do so many people on the political arena think it’s
a good idea to take back the money that workers have already earned?

STRS (especially Jim & Bob), are you listening?

(Click to enlarge)

NO other Ohio pension system pays out at the
rate of 88.5% Final Average Salary for 35 years work....they all (except STRS)
pay 77%......so, the solution IS VERY EASY for STRS...immediately stop offering
88.5% and drop it back to 77% for 35 years! Stop
penalizing current retirees with additional COLA cuts!

Dave Parshall: A message to Mike Nehf

From Dave Parshall

January 18, 2014

Hi, Mike, long time since you heard from me. I assume you remember me. I
always tell folks that you were always honest and up front with me. Please read
a message we sent out to all our former CORE members and to McGreevy and Stein
who are supposed to represent retirees.

You know, Mike, it does not make sense to keep hitting retirees especially
the older retirees, like me, now, who don’t have the large pensions that
retirees do today. Certainly it makes no sense in terms of fairness to still
allow the unearned 88%/35 year pensions that continue to cost us money on the
backs of the older lower pension retirees. At this point I feel if you got the
88% you don’t need a COLA for at least ten years or even ever unless our fund is
below the 30 years unfunded liability.

As you and the Board try to find an answer to the mistake made by the
accounting firm, please keep these thoughts in mind. I know greed pervades our
society these days, but OPERS always seems to be fair to their older retirees
while STRS seems not to be able to find a spine to do so. Oh yes, OPERS doesn’t
have an OEA telling what to do.

Bob Jones: Some words about the ad hoc raises and an open letter to ORTA

Bob Jones to Kathy Kienle

January 16, 2014

Subject: Re: Bob Jones on: Re: An open letter to Ann
Hanning

Kathy,

If my memory serves me correctly, the last periodic ad hoc raise
on our base was approximately 1998. [Another retiree writes "Bob, I do not
believe we have had an Ad Hoc raise since 1989 or l990. I know that I missed it
and I retired in l992!] It was especially good to those who had been
retired the longest. My personal opinion, as to the reason for the delay in this
needed base raise, is politicians that undervalue the benefits of public
education and our OHSTRS officials that forget writing checks to retired
teachers is the reason our OHSTRS was established in the first place.

Bob Jones

.

From Bob Jones

January 16, 2014

Subject: Bob Jones on: Re: An open letter to Ann Hanning

To all ORTA members:

Just to remind ORTA members that every 15 to 20-years we have had ad
hoc raises from the Ohio Legislature who regarded traditional public
schools as necessary to grow Ohio's economy both in the present and the future.
If the STRS Board decides to cut retired teachers COLA, once again, it would
seem to this ORTA Life Member that the ORTA officials, as well as our two STRS
Retired Teacher Reps, should lobby for this ad hoc increase to our base
pension.

It seems to me, sadly, that a "game is being played" to keep retired
teachers from ever having any increases to keep us up with inflation of the
dollar, especially today when the Feds came out with data on the increase of
wholesale prices. As every thinking individual knows, when wholesale prices
increase, retail price increases are not far behind.

All three branches of our Ohio government should not skimp on the education
of our children. In particular, the Ohio Legislature is responsible for the
financial health of retired teachers - which is certainly an incentive for them
to do that which is right for the future of Ohio. In order to move our state to
a bright economic and culturally great future without financially healthy
retired teachers, there is little incentive for our best college students to
enter into one of the most honored professions: teaching in traditional public
schools.

About Me

A graduate of the Oberlin Conservatory of Music and the Baylor University School of Music, I am a professional symphony musician by background. I am also a retired elementary classroom teacher (nonmusic), having taught in the Alliance (OH) City Schools 2-1/2 years and the Columbus Public Schools 30 years. My first job was as harp instructor at The University of Texas; currently I am a Lecturer in Harp at The University of Mount Union. As a retired educator and a life member of a number of professional organizations, including the Ohio Retired Teachers Association and the Ohio Education Association-Retired, I also worked through CORE (Concerned Ohio Retired Educators, which officially disbanded 9/20/12) to help bring about badly needed reform in our teachers retirement system, STRS Ohio. My e-mail: kbb47@aol.com.